Page:The Bank of England and the State, 1905.djvu/13

made in all the domestic relations of society, the wages of labour, pecuniary transactions of the highest amount and of the lowest, the payment of the National Debt, the provision for the national expenditure, the command which the coin of the smallest denomination has over the necessaries of life, are all affected by the decision to which we may come."

The Act of 1844 was passed, as you are aware, with only slight modifications from the original Bill as introduced by Sir Robert Peel, and that it has stood the test of time remarkably well is beyond dispute. But it also appears to me beyond doubt that one of the reasons, indeed, the main reason, for its having worked so well, has been the unfailing recognition by the authorities in charge of the Bank of those undefined duties, of that unwritten law, which in our country has, in so many cases, developed in the course of natural evolution and has taken the place of legal enactment.

The main idea of the Act was to establish once and for all the safety of the gold standard and the convertibility of the bank-note, and, with that, the safety of our currency and our banking systems. But the developments of modern banking no one could foresee. It is singular how, throughout the debates in Parliament at the time, deposit banking, which now plays so important a part of our currency system, was hardly mentioned at all, and in confining the Act almost entirely to the regulation of note-issues it was never contemplated how unimportant a part such issues were, in the future, to play in the commercial life of the nation. Whether the Act itself is sufficient for the needs of to-day, whether the duties, these undefined but universally admitted duties imposed upon the Bank, are not almost too onerous, without the co-operation of those whose transactions also have an important bearing on the currency of the country, it will be part of our object to-night to consider.

To enter upon the relations between the Bank and the State as regards its ordinary functions of Government Banker and Keeper of Accounts is not my object, for nothing useful would be gained thereby, and the information on these points